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To rebuild your finances, take shame out of the equation

Kimberly Palmer, NerdWallet.com
Published 10:00 a.m. ET May 12, 2018

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When it comes to your financial future, procrastinating can make things much harder down the line. Here's how to get confident about your money.
USA TODAY

After falling victim to a credit card scam that left her on the hook for $35,000, Tiffany Aliche, also known as “The Budgetnista,” lost her job when the day care where she worked closed down. Shortly after, she fell behind on her mortgage payments and lost her home.

She knew she had to rebuild her financial life, but she wasn’t sure how to find the motivation to do so until a friend gave her some advice that enabled her to move past the shame and embarrassment she was feeling. “My friend said, ‘Oh, you are a typical 20-something. We all have debt.’ She made it seem normal,” recalls Aliche, 38.

That simple mindset shift allowed Aliche to feel empowered and start taking action. Today, Aliche teaches others how to improve their finances through her writing, workshops and classes.

If you’re looking to rebuild your own financial life after a sequence of bad luck (or bad choices), Aliche suggests the following five strategies:

1. Talk about what went wrong

“I fell into a funk,” Aliche remembers, after being hit with the triple whammy of credit card debt, job loss and home foreclosure. That’s when she had that life-changing conversation with her friend, who normalized her problems. “She took away the shame,” Aliche says.

Once that shame evaporated, Aliche says she was able to make a plan. She moved back home with her parents, lived frugally, received unemployment checks, and started saving money and paying off her debts.

2. Make better friends

Aliche originally got into credit card trouble when she befriended a young man who persuaded her to take out cash advances on her credit cards and give him the money to invest in his business. She never saw that money again. “At the time, I didn’t see red flags,” she says, acknowledging that she made a big mistake in trusting this person. “It was a foolish mistake.”

Today, she makes friends who help her make positive financial choices and says she learned her lesson about trusting people too quickly.

3. Embrace a frugal lifestyle

After living with her parents and then her sister, Aliche moved into a group home in downtown Newark, New Jersey, with other young women. She paid about $500 a month. “We were all in our 30s, and everyone was starting a business,” she says. Her new roommates helped one another by sharing their expertise and entrepreneurial ideas.

“One did my book cover and one coached me on getting a business up and running,” she says. And that is when the Budgetnista concept took off.

4. Avoid repeating the same mistakes

“I’m still super-frugal,” Aliche says. When she got married, she and her husband bought a new house and her car with cash. “It can literally never be taken from us,” she says. “I want to know I can maintain my same lifestyle, no matter my income,” she adds. “I don’t ever want to go back to a place where in the blink of an eye, everything can be wiped out.”

Aliche still uses a credit card, but she pays it off every month. “I just use it to earn travel points,” she says.

5. Teach others what you learned

Soon, Aliche had a booming business, which included making budgets for people and teaching financial literacy, both online and in person. Her negative experiences turned into an asset for her. “I was teaching from a place of having lived through it, so I’m grateful. Now I have an empathy that I never had before. It allows me to teach from a place of understanding,” she says.

“You are not a terrible person because you made a terrible mistake. People need to hear that,” Aliche says, just as her friend once told her.